MN4057 Digital Business and Emerging Tech (MN4057)
Institution
London Metropolitan University (LMU)
Assessment criteria, identify the following:
- E-business model that the website uses, commenting on specific strengths and weaknesses
- Competitive strategy and digital business strategy the company follows and provide recommendations
- digital marketing strategies and options and provide rec...
MN4057 Digital Business and Emerging Tech (MN4057)
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MN4057 Digital Business– Assessment 1 (3000 words)
Chosen Business - StockX
Academic year 2021/2022
Introduction
StockX is an online marketplace where people can buy or sell items. The company is predominately known
for sneakers and streetwear but has recently opened lines of electronics, collectibles, accessories such as
watches and handbags and much more. StockX describes themselves as the world’s first ‘’stock market of
things’’.
Page 1 – E business Models
An e-business model is the strategy or approach that an organisation uses to become profitable on the
internet. The buyer and seller do not need to meet in person but instead the business transactions take
place online. There are multiple types of online business models including brokerage, advertising,
infomediary, merchant, manufacturer, affiliate, utility, and subscription.
The e-business model that StockX uses is the Merchant model. This model involves bringing buyers and
sellers together and facilitating transactions. Specifically, Stock X serves as an online platform which
facilitates auctions between buyers and sellers, then collecting transactions and payment fees. Sellers then
send the purchased goods to one of the Stock X facilities for verification and inspection, the authenticated
products are then shipped to the buyers. If the products are not genuine then the item is returned to the
seller and they buyer is given a refund.
The Merchant model – Advantages and Disadv
The merchant model is easy to scale and there are no boundaries, meaning you can sell your products to
customers based on their locations. In relation to StockX, this is true. As previously stated, although StockX
is more widely known for their wide variety of trainers, the company also has other lines including clothing,
games consoles, smartphones, computer hardware, collectibles, watches, and handbags.
Another advantage is that there are no branding struggles. StockX simple acts as a facilitator for
transactions online and its purpose its purpose is to create an access point for customers, therefore
products sold on the website, whether it receives both good and bad reviews, doesn’t directly affect
StockX but rather the brand who created the product.
Another advantage is that, although StockX is a facilitator, they still must focus on how to improve
customer retention. One way of doing this is by providing customers with an easy and exceptional buying
experience. This includes aspects such as ensuring the website user-friendly and easy to navigate.
However, there are also some disadvantages such as
Being an online business means that there are always chances of fraud occurring. It is important for e-
commerce businesses specially to invest in cybersecurity to ensure that customer and other sensitive data
is safe. StockX is no different because if something were to go wrong, the company would face a lot of
backlash and legal issues.
, Although e-commerce business conduct transactions online. These businesses still require a large
investment for warehouses and storage spaces for their products, along with any other logistics such as
different distribution channels. In relation to StockX, the company has authentication warehouses where
products are sent for inspection and authentication before they are sent to the buyers
Page 2 – Competitive strategy
A competitive strategy is a organisation’s long term plan to gain a competitive advantage of their
competitors in the same industry. However, before creating a competitive strategy, the company needs to
at least evaluate strengths, weaknesses, opportunities, and threats within the industry.
Stock X’s current top competitors are Stadium, GOAT and Farfetch. This is because they all offer similar
services and products within the fashion and retail industry.
Stock X competitive strategy includes the following:
- Stock x exclusively sells deadstock sneakers, deadstock simply means that sneaker or clothing has never
been tried on by another person and still has its original tags. Additionally, deadstock can also mean that the
item is no longer being made and is therefore rare or limited edition.
1. Extensive information about sneakers is already available such as shoe model, colour, release date, pictures
and retail prices – this eliminates all the hard work for sellers and allows them to sell on the website easier
compared to other website where you have to take pictures and create interesting and accurate descriptions
yourself – additionally makes the selling process on stockx very easy and beginner friendly
2. The authentication process – Majority of consumers online are subject to scam of fake or replica
merchandise, making them nervous to make purchases online outside of the original retailers store or
website. However, stockX eliminates this worry by authenticating products to ensure they are genuine
before they are shipped to the customer. If they are real, shoes are given the noticeable green StockX
verification tag and then shipped to the customer.
3. Anonymity of stockX, another useful feature of stockx is that throughout the process both the buyer and the
seller are anonymous, therefore the main focus remains on the trainers or other products. And because each
item is authenticated by stockx themselves, there is no risk for the customer. This allows new resellers to
have a fair chance at selling sneakers on the website. In comparison to Ebay, customers often look at the
sellers reviews before purchasing, reviews are a very important factor that can sway a consumers decision to
carry out a purchase or find another seller
Why people don’t like selling on stock X
4. Free market – this means that customers determine the value of sneakers. Resellers do not like the fact that
buyers can place bids that are lower than the average market value, which in turn can lower the value of the
shoe on the website
5. Large fees – like many other online platforms, sellers are charges a commission fee for using the website,
which is how these online platform make money. However, on stockx they charge sellers a fee of 9.5%, in
addition to this stockx also charges shipping fees and also a payment processing fee. All which decreases
how much profit you have made after a sale.
6. The buying process on stockX – Can be confusing for nee users because instead of seeing one price (similar
to stores), there are 3 different prices which all vary widely – Last sale, Buy( aka Bid), Sell (aka Ask)
7. Stockx has many competitors such as Stadium Goods ( recently purchased by Farfetch), GOAT, ebay and
more
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